YZi Labs Increases Stake in Ethena's USDe Stablecoin
YZi Labs Boosts Investment in Ethena
YZi Labs, a venture capital firm focused on technology, has increased its investment in Ethena, the company behind the USDe stablecoin. This move is intended to support the broader use of USDe across the cryptocurrency landscape, including both decentralized finance (DeFi) and centralized exchange platforms.
The investment will facilitate USDe's expansion onto the BNB Chain. Furthermore, it will allow Ethena to continue development on its USDtb stablecoin and its institutional settlement layer known as "Converge," according to a statement from YZi Labs.
Key Developments
- USDtb: Backed by short-duration treasury assets, including BlackRock's BUIDL.
- Converge: An Ethereum Virtual Machine (EVM)-compatible chain designed for tokenizing real-world assets.
This investment aligns with YZi’s objective to support digital dollar infrastructures that promote efficiency and liquidity within the financial ecosystem.
Guy Young, CEO of Ethena Labs, stated that embedding stable, yield-bearing assets into the crypto economy has always been the ultimate goal for digital dollar distribution. He added, "With USDe now scaling across exchanges, DeFi protocols, and global user bases, that vision is becoming a reality."
USDe Expansion and Market Position
YZi initially invested in Ethena through its Season 6 Incubation Program in February 2024, prior to the public launch of USDe. USDe is a synthetic dollar primarily backed by cryptocurrencies and stabilized using a delta-neutral hedging strategy to maintain its $1 peg.
The expansion of USDe on BNB Chain will involve new money markets, protocol integrations, and ecosystem partnerships, according to YZi.
Since its launch, USDe has grown to a $14 billion market cap, ranking it behind only Tether (USDT) and Circle's USDC, which hold market caps of $171.5 billion and $73.9 billion, respectively. Increased adoption of USDe could challenge the dominance of USDT and USDC within the crypto ecosystem.
Ethena's Strategic Backing
YZi recently highlighted Aster, a decentralized perpetuals exchange platform poised to integrate USDe, signaling potential expansion of USDe use cases. Ethena's backers also include traditional finance giants Fidelity and Franklin Templeton, as well as crypto VC firm DragonFly.